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article imageBitcoin prices may be preparing for a drop after brief recovery

By Ken Hanly     Jun 12, 2018 in Technology
On Sunday, bitcoin hit a two-month low of $6,619 on Sunday but recovered on Monday closing at $6,877. However, according to analysis by CoinDesk the slight rebound could be short-lived.
CoinDesk analysis
The CoinDesk article was posted at 10:00 UTC. At that time the price of bitcoin(BTC) on Bitfinex was $6,825 which was 3 percent up from its recent low.
The slight recovery may be connected with extreme oversold conditions and could extend into another day. However, it will be difficult for the price to rise again over the $7,000 level as there are several resistance lines. Added to this, the long duration charts are now turned bearish. It would be difficult to hang on to any gains above $7,000.
The article suggests that the recovery could turn out to be a dead cat bounce, or a temporary recovery in a bear market that will be followed by a renewed downward trend.
While moving higher the price could face resistance at the May 29 low of $7,040 which is also the same as a former support level. A key Fibonacci retracement level is also located around $7,000, the 38.2 percent retracement being at $7,008.
What is even worse is that even the lower 23.6 percent Fibonacci replacement value of $6,859 is a level which bitcoin is finding acceptance difficult as the price since opening today has hit a low below that. This means it will be difficult to reach the higher $7,008 level.
The moving averages (MAs) are also bearish with the 50-hour, 100-hour, and 200-hour MAs declining.
Longer term charts also show a bearish trend. The downside break of the pennant pattern a while back has revived the bear market. The way is now open for a drop below the last February low of $6,000.
A major support level is $6,000 and a drop below this could open a further drop to $4,496 the 100-week moving average and even $3,300.
The CoinDesk outlook
Based on its analysis CoinDesk predicts: "A minor corrective rally could be in the offing, but will likely run out of steam above $7,000. The broader outlook remains bearish with bitcoin likely to test $6,000 in a week or two.
Only a daily close (as per UTC) above the 10-day MA, currently seen at $7,376, would abort the bearish view."
Present situation
The BTC price opened June 12 at $6,877 but that was the high so far today with the low being a bit above $6,500. It is now a little over an hour into June 13 UTC. The price of BTC opened at $6,548 and the high so far today has been $6,570. At an hour and twenty minutes into June 13 UTC the price of bitcoin is $6,564 marginally above the open. The present price of bitcoin can be found here.
So far it seems that bitcoin is again trading in a narrow range. A sharp drop down again has not happened as yet but it could occur later on today or even later in the week. The price is still far above the major support level of $6,000 but it does not show any sign of breaking out over $7,000 either.
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